are Washington, California, Montana, Missouri, Arkansas, Mississippi, Kentucky, Tennessee, parts of Pennsylvania, Ohio, New York, Maine, New Hampshire, Vermont, Massachusetts, South Carolina, Alaska, and Hawaii.

The committee's concern relates to the broadspread implications of these findings and problems-specifically, as to the operations and activities of the Federal agencies involved, whether or not the operations and regulations of these agencies, over which the Congress has control, have been and will be adequate in the circumstances.

In response to the chairman's letter, the Comptroller General first submitted a report on July 31, 1967, entitled "Operation of Federal Housing Programs in Areas of Potential Geologic Instability, Foster City, California." A second report, similarly entitled and dealing with the other questions raised in the chairman's February 15, 1966, letter, was submitted on May 20, 1968. (These reports are numbered B-158554 and B-158554(1).) The reports led to hearings held by the subcommittee on May 7 and 8, 1969.

The principal recommendation in the report urges that:

Federal agencies involved in housing financing should take adequate precautions to guard against the hazards of geologic instability. (1) Written instructions now lacking should be expeditiously issued dealing with the requirements for areas subject to earthquakes and other hazards both as to technical aspects to be considered and in the procedures to be followed in applying them.

(2) Soils reports should be required of sponsors, including a detailed geologic report as to the site, prepared by a competent engineering geologist.

(3) Such reports should be reviewed by the agency's site engineers, and engineering geologists should be added to the staff.

(4) To complement this, the Geological Survey, to be fully responsive to research and study needs in this field, even on a reimbursable basis, should increase its engineering geology staff.

(5) Where the agency does not follow the advice of its site engineers or of special reports from technical agencies, the approval of the subdivision should require that each purchaser receive a copy of such advice, recommendation, or special report.

(b) Benefits.-On October 8, 1969, the chairman of the Committee. on Government Operations was advised by Mr. Donald E. Johnson, Administrator of Veterans Affairs, that in the period since the hearings VA had been reviewing their policies and procedures concerning the determination of the acceptability of new subdivisions.

VA testified at the hearing that instructions had been given their field offices in 1968 to coordinate with the Geological Survey for evaluation of new subdivisions in areas of geologic instability. VA had to revise those instructions, however, because their case referrals overtaxed the resources of the Geological Survey.

In principle, VA states it is in accord with the above recommendation, but they did note the impact of fiscal restraints upon their ability to comply fully.

The Geological Survey of the Department of the Interior has advised the committee of its accord with the recommendations contained in the committee's report.

On June 25, 1970, the Department of Housing and Urban Development informed the chairman of the Special Studies Subcommittee that FHA had reviewed the Foster City situation and could no longer withhold approval for the future development of Foster City. This review did not include any new studies by the Corps of Engineers as to the safety of the dikes.

By letter of September 10, 1970, HUD advised that it was proceeding with the development of Redwood Shores. HUD stated it had obtained a report from the Corps of Engineers, but none from the Geological Survey before doing so. HUD has been requested to inform the committee in detail as to the bases for its action. Both FHA and VA have withdrawn entirely from the Princess Sierra (Calif.) development.

It is impossible to offer a figure of savings to the Government at this time; but should a major earthquake, or a landslide in unstable hilly areas occur, the ultimate financial responsibility of the Government would be in the hundreds of millions or billions of dollars. Since major real-estate developments in hazardous geologic areas are unlikely to proceed without Federal mortgage insurance participation, reasonable restraint by the Government agencies involved should minimize the extent of the potential loss in case of disaster, thus saving the economy vast sums of money.

(c) Hearings.-Hearings were held by the Special Studies Subcommittee on May 7 and 8, 1969. Testifying were witnesses from the Office of Science and Technology of the Executive Office of the President, officials of the General Accounting Office, the Federal Housing Administration of the Department of Housing and Urban Development, the Geological Survey of the Department of the Interior, and the Veterans' Administration. The hearings were printed.

3. "Office of Economic Opportunity and the Medical Foundation of Bellaire, Ohio." House Report No. 91-523, September 27, 1969. Eighth Report by the Committee on Government Operations. (a) Summary. This report is based upon hearings held before the Special Studies Subcommittee on May 20, 21, and 22, 1969, in Washington, D.C., during which time testimony was heard from witnesses who came to the hearing from several communities in Belmont County, Ohio; a representative of the General Accounting Office's regional office in Columbus, Ohio; former officials and officials of the Office of Economic Opportunity; officials of the Medical Foundation of Bellaire; and physicians representing the Belmont County Medical Society.

The report cites several failures of OEO to comply with its own. guidelines and procedures. The agency is criticized for bypassing the local community action agency to approve a grant directly to the Medical Foundation of Bellaire, without making any attempt to follow its own "special appeals procedure." This action, the report states, only helped to increase local conflicts, issues, and problems, including the submission to OEO of competing proposals for a comprehensive community health care plan by the Medical Foundation of Bellaire and the Belmont County Medical Society.

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The principal recommendation in the report states that OEO should consider providing for the active participation in the comprehensive health services project in Belmont County of the greatest feasible number of the practicing physicians, hospitals, and private clinics in the target area. This consideration, the report states, should involve the problem of providing a broader choice of physicians, and whether this broader participation would not materially aid in solving the current problem of transportation enrollees.

An equally important recommendation states that OEO should give consideration to making the community action agency the grantee for the health project. The committee felt that such an action could increase coordination and cooperation between and among all OEOsponsored projects in the area, and with various local health resource agencies or groups as well.

(b) Benefits. By letter dated November 11, 1969, Mr. Donald Rumsfeld, Director, OEO, advised Chairman Dawson that he had read the committee's report with great interest and care and had directed that every feasible step be taken by the OEO staff to attempt to carry out the recommendations of the committee as rapidly as possible. Mr. Rumsfeld described actions that had been taken to correct the identified administrative deficiencies and to strengthen the operations of the project. The actions taken, as described by Mr. Rumsfeld, are consistent with the recommendations of the committee, and include efforts directed toward increasing the number of local physicians actively participating in the project, in line with the objectives and standards of the comprehensive health services program guidelines.

It is too early at this date to estimate the savings to the Government which this report brought about and is continuing to bring about in the OEO. But because of the report's criticism of the general laxity within OEO regarding its own guidelines and procedures, a rather extensive reorganization within the OEO headquarters office has taken place. Moreover, a trial audit of the Medical Foundation of Bellaire requested by the subcommittee has resulted in OEO's internal auditors "questioning" more than $36.000 spent by the grantee during the 6 months period of July 1-December 31, 1968, as well as other items which could increase the sum considerably. On the basis of this trial audit, the chairman of the subcommittee has requested the Comptroller General to make a full audit of OEO funds granted to the Medical Foundation of Bellaire from the start of program year A to the present time. This full audit is expected to get underway after the foundation and OEO come to full agreement on a revised cost allocation system. The subcommittee has been advised that the revised allocation system will not apply to the first 3 program years, A, B, and C.

(c) Hearings.-Hearings were held on May 20, 21, and 22, 1969, in Washington, D.C. Among witnesses heard were residents from several communities in Belmont County, Ohio; a representative of the General Accounting Office's regional office in Columbus, Ohio, who conducted a survey of enrollees in the OEO-sponsored comprehensive health care plan of the Medical Foundation of Bellaire; physicians representing the Belmont County Medical Society; former officials and officials of the OEO; and officials of the Medical Foundation of Bellaire, Ohio The hearings have been printed.

4. "Government-Rejected Consumer Items." House Report No. 91773, December 19, 1969. Seventeenth Report by the Committee on Government Operations.

(a) Summary.-This report is based upon an investigation and hearings by the special consumer inquiry of the subcommittee in April 1968, in Washington, D.C., during which time testimony was heard from officials of the Defense Supply Agency, the Department of Agriculture, and various agencies of the Department of Health, Education, and Welfare.

The report describes what may generally happen to consumer-type products which the Federal Government contracts to procure, but which it may reject upon delivery, or prior to delivery, because of a lack of conformity with the specifications in the contract. The report states that most often, when supplies do not conform, they are rejected back to the contractor, and their disposition falls within his control. The contractor may then do one of three possible things to dispose of these Government-rejected items:

(1) If the rejected item is beyond repair or use, it is destroyed; (2) If the product can be rehabilitated by the manufacturer, he may resubmit it to the procuring agency for reinspection, or sell it in normal commercial channels to the public; or

(3) The product is sold without rehabilitation on an "as is" basis into normal commercial channels to the public.

It was this latter practice of selling unrehabilitated products which have been rejected by the Federal Government to unsuspecting consumers that triggered the committee's concern, for the public was being asked to buy inferior or substandard products, as well as products that could be dangerous to health, without any discernible ripple of care on the part of any Federal agency. Since the Federal Government is by far the largest single purchaser and user of consumer-type products in the United States today, Federal responsibility for the protection of the consuming public of Government-rejected items cannot be overly stressed.

The report, therefore, recommends that Federal agencies which reject consumer products for reasons which would clearly render them less fit than counterpart products available in the marketplace, unless rehabilitated, should report such rejections to the Federal Trade Commission for (1) a determination of the manner and nature of disposition by the contractor, if any, and (2) if the product or item is to be sold to the public without rehabilitation, a determination as to whether this would constitute a violation of section 5 of the Federal Trade Commission Act. An additional recommendation of importance is that Government procurement agencies should not sell into private trade channels for ultimate resale to consumers products that are substandard without first obtaining written assurances from vendors of substantial rehabilitation or adequate notice is made that the item is Government rejected.

(b) Benefits.—The Federal agencies especially involved in the matter-the Defense Supply Agency, Food and Drug Administration, and the Department of Agriculture-have instituted written procedures for protecting the consuming public from possible harmful or low quality rejected Federal items. Now, when an agency rejects an

item where health or safety is involved, all relevant agencies are notified.

(c) Hearings.-Hearings were held on April 2 and 3, 1968, and were printed.

5. "The Role and Effectiveness of Federal Advisory Committees." House Repor. No. 91-1731, December 11, 1970. Forty-Third Report by the Committee on Government Operations.

(a) Summary.-This report is based on a study that extended through the better part of a year, and included 5 days of hearings at which recognized experts and other persons closely associated with the problem area testified. An objective of the study was to examine the efficiency and economy of the use of governmental committees, to see whether legislative and administrative guidelines are needed to improve the management and utility of committees, commissions and councils as instruments of Government. The study included analyses of a detailed questionnaire sent to each department and agency regarding its advisory committees, and to all known Presidential commissions and committees, as well as interagency committees. The statistics compiled by the subcommittee are the most nearly complete available. The study was not directed at any administration or administrator.

The subcommittee's survey disclosed the presence of 140 Presidential committees, in addition to 73 interagency committees with two or more Cabinet members and 117 interagency committees with one or more cabinet members, most of which were set up to advise the President. The survey also revealed that there are at least 1,519 advisory bodies in Government, and that these groups spent in excess of $65 million annually-that the total committee membership encompasses about 20,000 individuals, with an assigned staff of approximately 4,400 persons. However, the subcommittee estimates that there are an additional 1,800 advisory bodies in the Federal Government, and that the total cost of all exceeds $75 million annually.

The principal recommendation of the report is that "Congress should spell out in public law the philosophy behind and the need for advisory bodies and definitely establish policy and administrative criteria for their use at all levels of Government." Another important recommendation is that congressional committees should recognize the expertise of their own staffs when considering the creation of an advisory commission, committee, or council, or delegate the problem to an existing departmental or agency advisory committee.

(b) Benefits. By eliminating duplicating advisory bodies, by ending the existence of useless ones, by demanding better management of existing ones, and by recommending legislative guidelines for all new ones, a substantial saving can be achieved in the overall annual cost of these committees, and Congress, the President, and the public can be served more efficiently by these advisory bodies.

(c) Hearings.-Hearings were held on March 12, 17, and 19, and on May 26 and 27, 1970. The witnesses included Members of Congress; the Comptroller General; the Assistant Director for Executive Management, Office of Management and Budget: commission chairman: departmental officials; former Government officials; academicians, and others. The hearings have been printed.